Senator Rand Paul (R-KY) visited Jon Stewart last night for a (relatively) wonky conversation about budgets and government regulation. When it came to the recession, Paul placed the blame squarely on the Fed:
"If you say capitalism caused the recession, then you agree with the current Administration who says we need more regulation of capitalism. But from my point of view, you say capitalism didn't fail. Government intervention through the central bank and through the interest rate failed."
Not even lip service to absentee risk management on Wall Street. Or predatory lenders. Or credit ratings agencies that thought they were supposed to grade on a curve. Paul did later say that the banks that "made bad decisions" should have been allowed to fail, but somehow doesn't also believe those bad decisions were major contributors to the housing collapse.
This is not a defense of the Fed. It's a defense of context.
Watch the relevant video clips below: